Nowadays, the security of images or information is very important. This paper introduces a proposed hybrid watermarking and encryption technique for increasing medical image security. First, the secret medical image is encrypted using Advanced Encryption Standard (AES) algorithm. Then, the secret report of the patient is embedded into the encrypted secret medical image with the Least Significant Bit (LSB) watermarking algorithm. After that, the encrypted secret medical image with the secret report is concealed in a cover medical image, using Kekre’s Median Codebook Generation (KMCG) algorithm. Afterwards, the stego-image obtained is split into 16 parts. Finally, it is sent to the receiver. We adopt this strategy to send the secret medical image and report over a network securely. The proposed technique is assessed with different encryption quality metrics including Peak Signal-to-Noise Ratio (PSNR), Correlation Coefficient (Cr), Feature Similarity Index Metric (FSIM), and Structural Similarity Index Metric (SSIM). Histogram estimation is used to confirm the matching between the secret medical image before and after transmission. Simulation results demonstrate that the proposed technique achieves good performance with high quality of the received medical image and clear image details in a very short processing time.