this paper presents a capacity-improved Spread Spectrum (SS) watermarking method for data hiding and security for medical image and Electronic Medical Record (EMR) transmission in Teleradiology. SS watermarking is more secure than other watermarking methods but currently has low data carrying capacity due to the spreading of a single bit in larger cover sample in order to achieve higher robustness and security. In this work, a new method in spatial domain is proposed in order to improve on the current hiding capacity of just one bit per sample to up to 6 bits per sample (8×8 pixel block). This new watermark compression encoding method is suitably adapted for blind SS watermarking for hiding patient data securely in medical images of high pixel depth. The new method was successfully implemented and evaluated using Magnetic Resonance Image (MRI) scans.