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This paper proposes a new low complexity near-lossless image compression method and its VLSI design for low power and high frame rate in the wireless endoscopy capsule system. Assuring outstanding compression performance and high image quality, the proposed method with the features of low complexity, low storage overhead and real time data processing, makes it ideal for hardware implementation. The VLSI architecture consists of two pipelined parts: The preprocessor and the JPEG-LS engine. A fully pipelined VLSI structure with a dedicated clock management scheme is proposed for the JPEG-LS engine, which ensures a low power application, and real time data processing as well. The hardware implementation has been verified on FPGA and implemented in 0.18mum CMOS technology.