Compression of the image is achieved using image compression techniques that remove visual information that is not perceived by the human eye. The emphasis in medical applications is to preserve important image features that contribute towards accurate diagnosis. Edges in the medical images are vital for accurate detection of boundaries of lesions and tumors, which in turn requires the preservation of edges. In this paper, method to preserve edges to achieve a decompressed image with a higher content of visual information is presented. Edge detection is a frequently used technique to extract the edge information in image compression system. For preserving the edges of the images, the compression algorithm is combined with edge detection.