In order to decrease the communication bandwidth and save the transmitting power in the wireless endoscopy capsule, this paper presents a low complexity and high efficient near-lossless and lossless image compression algorithm for hardware design based on the Bayer format image, The algorithm can provide better compression performance and lower complexity than conventional interpolation-first methods and other existing similar compression-first methods. Moreover, the algorithm can provide lossless compression for the region of interest （ROI） and high quality compression for other regions. This algorithm can provide low average compression rate （2.18bit/pixel） with high image quality （larger than 47.57dB） for wireless endoscopic images.