Preheat oven to 375. In med saucepan, melt butter over medium heat. Add onions & let cook, stirring occasionally for about 4 minutes. While that is cooking, chop ham into small pieces.
Sprinkle flour & paprika & let cook, stirring occasionally. While whisking, add milk. Bring to a simmer & whisk until thick. Stir in ham, salt, pepper & Italian seasoning.
Cut potatoes in half, spread across a 8x8 or 9x9 pan. Sprinkle salt & pepper over potatoes. Spoon sauce over potatoes. *Optional: sprinkle crushed red pepper flakes.*
Sprinkle cheese over top. Put aluminum foil over pan & let cook for 40 min (to really get potatoes soft). Then remove aluminum foil & let cook 25 minutes. Let cool.
