In order to effectively reduce the required data capacity of three dimensional (3D) medical image sets to facilitate transfer and storage, this study has taken the redundancy in between image frames into account to propose a block matching algorithm based on motion estimation. By utilizing the trait of minimal change between frames of medical image sets, an inverse-diamond search is performed on the images. In order to increase compression ratio, we have also taken near lossless compression into consideration by defining a threshold value during the process of block matching search to obtain the ideal balance between increased compression ratio and tolerable loss of image quality. Results of the experiment indicated that the average number of search points required for inverse diamond search is only 7% of what is required for a full search. The speed improvement rate is 6.27% over diamond search. As for near-lossless compression, results showed that compression ratio could be increased between 5 to 7 with peak signal-to-noise ratio (PSNR) maintained at over 36 dB for all test image sets.