Need help installing replacing old shower drain

I recently moved into a house where the downstairs shower had apparently leaked. It was ceramic tile over plywood, no apparent shower pan membrane of any sort but some remnants of tar paper hanging off the rotted wood.
I've removed the plywood and am in the process of replace/repairing the rotted wood. My second task is to figure out what to do with the drain.
The existing drain was all metal, not the clamping type and is buried in concrete. The upper width is about 3" and it shrinks down to the pipe size a few inches below.
My main question is:
Do I really have to dig out the concrete around that drain to remove it or can I buy some kinda of dran that will insert into it? I would build up the floor around it to support the new drain.
I've looked at the clamping style (plastic) and at leave the lower diameter would fit into this drain cup. I've read that the drains usually connect to the pipe on the outside, not the inside (seems counterintuitive to me to keep water from leaking) and I would be proposing the opposite.
I suppose if the drain ever backed up, the water could find it's way around my drain and cause a problem.
Any suggestions are greatly appreciated. Thanks
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David Roberts wrote:

I admit, I'm a bit confused. (nothing new) Is the existing shower base one that is tiled over a cement base? If so, are you/have you removed the tiles? Do you plan to re-tile over it?
Or, are you dropping some pre-fab base over the existing base?
Is this on a slab or is there a basement below?
Jim
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<snipped>

It appears to be yes

Trying to, but they don't come off easy. Basically a chisel and hammer are making the tiles themselves crack moreso than pop off.

Yes, since there was no pan at all before, I need so create the mortar sandwich with the membrane in the middle.

Pre-fab would be nice but the off-set drain has posed a problem.

The shower is in the basement, nothing but foundation and dirt below. Thanks

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