The Ulster-born politician said that "direct governance" from Westminster was needed to deal with the mounting crisis in the health service.
The former Labour MP's comments come after a recent LucidTalk poll showed a clear majority of unionist voters won't back a return to Stormont until the Irish Sea border is removed.
The DUP have been in discussions with the UK government for months about changes to the Brexit deal which created a trade border in the Irish Sea. Both sides insist the talks haven't concluded despite a suggestion by Ireland's deputy prime minister that the talks had "more or less come to a conclusion" without a deal.
Yesterday morning Sir Jeffrey Donaldson told the BBC that "we need to see Northern Ireland's economic rights under the Act of Union respected and protected in law and our ability to trade with the rest of the UK restored".
It is unclear if anything on the table in discussions between the DUP and the UK government would fundamentally change the reality of an Irish Sea border, or alter Northern Ireland's de facto place in the EU single market – the reason for the sea border with Great Britain, which sets its own goods standards after Brexit.
The LucidTalk poll for the Belfast Telegraph suggested that Sinn Fein remain in the lead with 31% support, with the DUP on 28%, up two points from a previous poll in August.
Baroness Hoey told the News Letter: "Since October 1st more and more people are seeing the extra barriers being created by the Windsor Framework when carrying out their day to day business. The grassroots of Unionism have shown in the latest poll to be supportive of the DUP and TUV policy to stay out of an Executive until the internal border in the UK has been removed.
"They understand that restoring Stormont is not going to solve the other problems facing us here in Northern Ireland. I would call again for the prime minister to take responsibility for the people of Northern Ireland seriously and introduce direct governance starting with the health service."
Baroness Hoey's comments reflect a wider discussion in unionism about the benefit of the current Stormont institutions.
Sir Jeffrey told the DUP conference in October that the Stormont institutions would be an "essential element" in building the case for the union. He used his speech to hit out at those calling for direct rule, arguing that "time and again" Westminster had imposed laws not "in tune with the needs or wishes of the people of Northern Ireland".
The UK government has avoided taking big decisions about the day-to-day running of Northern Ireland as they seek to keep pressure on the DUP to return to powersharing.
The LucidTalk poll found Alliance on 16%, the UUP on 8%, down two points, the SDLP on 6%, and the TUV on 4%.